As we previously reported, (See Top Merrill Lynch Broker Thomas Buck Terminated Under Unusual Circumstances) news sources have been investigating the termination of financial advisor Thomas Buck (Buck) and his daughter Ann Buck by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), now known as Bank of America, NA (Bank of America) under circumstances that some would consider unusual.
Buck’s team managed nearly $1.5 billion in investor assets, was one of the company’s largest producers, and has been associated with Merrill Lynch since. Despite all these factors that would likely lead Merrill Lynch to continue to wish employ Buck, allegations were made that Buck executed unauthorized trades in client accounts.
Buck’s termination happened on March 6, 2015, and shocked colleagues. One person was quoted in news articles foreshadowed additional developments saying “There is a lot more out there. I think it’s a little bit of heavy-handedness on Merrill’s part. Tom was shocked.”
According to records kept by The Financial Industry Regulatory Authority (FINRA), Buck now has 10 listed customer complaints against him nine of which came within months of Buck’s termination. All of the complaints have similar allegations against Buck in that the customers allege that during a time period Buck engage in unauthorized trades in corporate debt and equities. Several of the complaints allege excessive trading and misrepresentations.
As a background, advisors are not allowed to engage in unauthorized trading. Unauthorized trading occurs when a broker sells securities without the prior notification and approval from the investor. Under industry rules, brokers must first discuss all trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors to recover losses due to the failure of brokerage firm to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.